Posted on: December 3, 2024, 02:45h.
Last updated on: December 3, 2024, 02:59h.
Citing “an abnormally hot summer in Las Vegas and economic uncertainty in an election year,” the operator of Resorts World Las Vegas disclosed to investors that the third quarter was the casino hotel’s worst three-month stretch in two years.
In a new regulatory filing, Genting Bhd said sales at its lone Las Vegas Strip property declined to $177 million in the July through September period from $218 million in the second quarter as earnings before interest, taxes, depreciation, and amortization (EBITDA) slumped to $16 million from $50 million. The operator added that in the third quarter, average room rates at Resorts World Las Vegas declined to $244 from $246 a year earlier with occupancy sliding to 85.1% from 91.1%. Genting told shareholders it’s taking action to bolster its Strip integrated resort.
Future projects such as additional dining, entertainment, retail offerings and new performances at the Resorts World Theatre are expected to drive significant foot traffic in the remainder of 2024 and beyond,” according to the operator.
The $4.3 billion Resorts World Las Vegas, the Strip’s most expensive integrated resort in terms of construction costs, opened in June 2021.
Resorts World Las Vegas Dealing with Challenges
In its roughly three-and-a-half years of operation, Resorts World Las Vegas has faced a variety of challenges, including opening at a time when the world was grappling with the effects of the coronavirus pandemic and the highest inflation in four decades, which arrived in 2022.
Additionally, the casino resort’s location has been viewed by some as a headwind. The Genting venue, the first newly minted Strip property in over a decade, is situated at the northwest end of the Strip, where the Stardust Casino was previously located. The north end of the Strip has long been seen as less desirable than the center and southern portions.
Still, analysts expect earnings at Resorts World Las Vegas to improve in 2025, and the property is widely viewed as a potential long-term growth driver for Genting. As such, the parent company is incentivized to provide financial support to the Las Vegas venue.
That’s exactly what analysts are betting on. In an August research report, S&P Global Ratings said it believes Genting will provide financial support to the Strip venue “under almost all foreseeable circumstances.”
Hilton Could Help
As is the case with some rivals, Resorts World Las Vegas is hoping a partnership with a widely known hotel chain can serve as a growth catalyst. Hilton is the hotel partner at the Strip property.
RWLV remains focused on achieving targeted projections by leveraging the Hilton branding partnership with over 203 million Hilton Honors members and capitalising on the property’s proximity to the newly expanded Las Vegas Convention Center,” according to the regulatory document. RWLV remains focused on growth opportunities, including ongoing efforts to expand RWLV’s database for casino and resort marketing to yield high net worth customers and drive repeat visitation.”
Genting added that average room rates at Resorts World Las Vegas for this year are around $267 compared to $256 last year.
